15 bids infuse new life into Kushinagar airport project

The department of tourism has received 15 technical bids from reputed infrastructure companies for development of an international airport at Kushinagar in eastern Uttar Pradesh. Kushinagar is one of the four most important pilgrimage sites associated with the life of Lord Buddha.

The much-awaited airport will be built on the public-private partnership (PPP) model at an estimated to cost R354 crore. As the project seemed to be heading nowhere at one stage, the host of bids it has attracted now augurs well for a smooth take-off.

A committee chaired by principal secretary and director general tourism Manoj Kumar Singh opened the bids on Thursday. “The bids are being evaluated by the project consultants. Thereafter, the process for inviting the financial bids will begin,” said Bharti Singh, officer of special duty in the department of tourism.

It will be one of the country’s first greenfield airport projects for which the department of economic affairs, union ministry of finance, has given inprinciple approval for viability gap funding.

The viability gap funding scheme provides financial support in the form of grants, one time or deferred, to infrastructure projects undertaken through public private partnerships if the financial returns are not seen to be adequate for a profit-seeking investor.

In such cases, the government can pitch in and meet a portion of the cost, making the project viable. This method is known as viability gap funding. Viability gap funding of 40% (Rs 140 crore) has been approved for the project. The centre and the state government will chip in with 20% of the cost each.

The airport will cater to both foreign and domestic Buddhist pilgrims and people from the region (eastern Uttar Pradesh, Bihar and Nepal) working in West Asia. There are about a lakh immigrants from the region in West Asia.

All statutory clearances for the project have been obtained. These include nods from the union ministry of environment and forest and in-principle approval from the steering committee of the union ministry of civil aviation, Singh said.

Earlier, the previous regime had envisaged developing an aviation hub at Kushinagar at a project cost of R850 crore. Owing to stringent conditions, the previous bidding process in 2010 had failed to go far.

It did not move beyond beyond the request for qualification (RFQ) stage. Once developed, it would be the biggest airport in the region. In fact, it could be bigger even than the existing airports at Varanasi, Patna and Bodh Gaya.